EXHIBIT 10.10
"***" - Confidential portions of this Agreement have been omitted and
filed separately with the Securities and Exchange Commission under a
Confidential Treatment Request, pursuant to Rule 406 of the
Securities Act of 1933, as amended
BY-PRODUCTS MARKETING AGREEMENT
THIS AGREEMENT, made this 19th day of September, 2002, by and
between CONAGRA TRADE GROUP, INC, a Delaware corporation ("CTG") and SWIFT &
COMPANY, a Delaware corporation ("Swift").
AGREEMENT:
1. PURCHASE OF PRODUCT. Pursuant to the terms and conditions herein,
Swift hereby agrees to sell to CTG, and CTG hereby agrees to purchase from
Swift, FOB the Swift processing facilities identified in Exhibit "A" attached
hereto (individually, a "Facility" and, collectively, the "Facilities"), all of
the rendered by-products identified in Exhibit "A" attached hereto
(individually, a "Product" and, collectively, the "Products"), resulting from
the processing of cattle and hogs at the Facilities.
2. SPECIFICATIONS. Specifications for all Products will follow the
applicable guidelines established by the American Fats and Oils Association
Standard Grades, Specifications and Quality tolerances.
3. PRICES. Except those quantities of Products, if any, that the
parties agree to price forward, prices for the Products shall be calculated by
the methods set forth on Exhibit "A" attached hereto and shall be based on
origin weights or first official rail. Any quantities of Products which the
parties agree to price forward shall be invoiced at the agreed to price at time
of shipment.
4. PAYMENT. CTG shall make payment for all Product purchased hereunder
from Swift by wire transfer to the account directed by Swift in writing to CTG.
Payments will be made within fourteen (14) days of CTG's receipt of each invoice
for Product.
5. OPERATIONAL PROCEDURES. CTG will schedule trucks and rail cars,
communicate truck and rail car schedules with the Facilities, enter shipping
orders, generate load number sequences and maintain open communication with the
Facilities to change shipping schedules. By 8:00 a.m. Omaha time, Swift will
provide CTG with written reports setting forth inventory, kill schedule and
conversion for each Facility. In addition, Swift will cause each Facility to
communicate directly with CTG on a daily basis with respect to any increase or
decrease in production at each Facility, any changes in rail switching/car
orders placed by Swift at each Facility, or changes in weight/ladings.
6. CLAIMS. Product claims will be handled by CTG and processed through
Swift. CTG will have approval on all claims processed through CTG subject to
Swift's consent which shall not be unreasonably withheld. Swift will have
financial responsibility for all approved claims.
7. SWIFT LIABILITY. Product liability is Swift's responsibility. CTG
will comply with 21 CFR Part 589, Substances prohibited from use in animal food
or feed animal proteins prohibited in ruminant feed.
8. AGREEMENT REVIEW. The parties agree to review the terms and
conditions of this Agreement in the event of any material change in government
regulation affecting any Product.
9. TERM. This Agreement will commence on September 19, 2002 and will
terminate on May 25, 2003.
10. PROFIT SHARING. Profit before tax generated from CTG's marketing of
the Products shall be split equally between Swift and CTG based on CTG's cost
structure for the twelve (12) month period ended Period 11 Fiscal Year 2002. CTG
will account for and accumulate such profits before tax and losses during the
term of this Agreement CTG shall pay Swift its share of net profits before tax
(if any) in a one-time payment within ten (10) days after the termination of
this Agreement or Swift shall pay CTG its share of net losses (if any) in a
one-time payment within ten (10) days after the termination of this Agreement.
11. ASSIGNMENT. Neither party shall have the right to assign this
Agreement, or any of its rights hereunder, without the prior written consent of
the other party; provided, however, that to the extent requested by Swift's
senior lenders, the parties shall execute and deliver such documents as may be
necessary to effect a collateral assignment of the rights arising hereunder.
12. FORCE MAJEURE. Neither CTG nor Swift shall be liable for, or deemed
to be in default hereunder or subject to any remedies of the other party as a
result of, delays or performance failures due to power failures, fire, acts of
God, acts of civil or military authority, embargoes, epidemics, terrorism,
strikes, riots or similar causes beyond such party's reasonable control, and
without the fault or negligence of CTG or Swift. Each party shall use reasonable
best efforts to minimize the impact of any force majeure condition it
experiences on the other party to this Agreement and to otherwise keep the other
party timely advised as to minimization and removal of such condition.
13. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Delaware, excluding its choice of law rules.
14. NOTICES. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and delivered personally or via telefacsimile or
overnight courier, or mailed by Registered, Certified or Express Mail, postage
prepaid, as follows:
2
(a) If to Swift: Swift & Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
ATTN: President and Chief Executive
Officer
Fax: (000) 000-0000
(b) If to CTG ConAgra Trade Group, Inc.
Eleven XxxXxxx Xxxxx
Xxxxx, XX 00000
ATTN: Xxxx Xxxxx, Director of By-
Product Merchandising
Fax: (000) 000-0000
or at such other address as any party hereto shall have designated by notice in
writing to the other parties hereto.
15. NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL A PARTY OR ITS
AFFILIATES OR THEIR RESPECTIVE OFFICER, DIRECTORS, REPRESENTATIVES AND EMPLOYEES
BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES OR THEIR RESPECTIVE OFFICERS,
DIRECTORS, REPRESENTATIVES AND EMPLOYEES, WHETHER BASED IN CONTRACT, TORT,
WARRANTY, OR ANY OTHER LEGAL OR EQUITABLE GROUNDS, FOR ANY LOSS OF THE INCOME,
PROFIT OR SAVINGS OR COST OF CAPITAL OR FINANCING OF THE OTHER PARTY OR ITS
AFFILIATES FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR ANY
EXEMPLARY, SPECIAL, OR PUNITIVE DAMAGES OF ANY KIND, RESULTING FROM OR RELATING
TO THIS AGREEMENT OR THE PRODUCTS DELIVERED HEREUNDER, EVEN IF THE OTHER PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
[Signatures on next page]
3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
CONAGRA TRADE GROUP, INC. SWIFT & COMPANY
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXX
------------------------------- ---------------------------------
Its: Vice President - Tax Its: Vice President
------------------------------ --------------------------------
4
EXHIBIT "A"
FACILITY LOCATIONS, PRODUCTS AND PRICING
FACILITY LOCATIONS.
Greeley, Colorado
Grand Island, Nebraska
Dumas, Texas
Nampa, Idaho
Omaha, Nebraska
Hyrum, Utah
Louisville, Kentucky
Marshalltown, Iowa
Worthington, Minnesota
PRODUCTS.
Blood meal
Inedible tallow
Edible tallow
Meat and bone meal
Choice white grease
Lard
PRICING. The USDA Tallow, Protein and Hide Report, FOB Central U.S. daily price
for each Product (USDA report NW_LS442) will be used to calculate a weekly
average (Friday through Thursday). The spreads to that weekly average (defined
below) will determine the purchase price for each Product at each Facility for
the following week. The price and volume will be established on Thursday
afternoon for the following week. Prices will be determined on a three (3) week
rolling average. The Meat and Bone Meal prices reflect an upcharge to treat all
MBM tons with the specified antioxidant.
Bloodmeal
Greeley Even
Grand Island Even
Xxxxx Even
Inedible Tallow
Greeley "***" Chicago Packer Tallow
Grand Island "***" Chicago Packer Tallow
"***" for polished inedible
tallow
5
Xxxxx "***" Gulf Packer Tallow, if no
Gulf Packer then Chicago Packer Tallow "***"
Edible Tallow
Greeley "***" Chicago Edible Tallow
Grand Island "***" Chicago Edible Tallow
Xxxxx "***" Gulf Edible Tallow, if no
Gulf Packer then Chicago Packer Tallow "***"
Meat and Bone Meal
Greeley "***"
Grand Island "***"
Xxxxx "***" USDA FOB Panhandle
Bloodmeal
Nampa "***"
Inedible Tallow
Omaha "***"
Nampa "***"
Meat and Bone Meal
Omaha ((USDA price )"***" x actual protein of
Product) "***"
Nampa "***"
Bloodmeal
Hyrum "***"
Inedible Tallow
Hyrum "***"
Edible Tallow
Hyrum "***"
6
Meat and Bone Meal
Hyrum "***"
Other Products produced at the Facilities that are not reflected in the USDA
Tallow, Protein and Hide Report; (e.g., #2 grease, low protein meat and bone
meal) shall be priced on a spot market basis mutually agreed to by the parties.
SWIFT PORK COMPANY (SWIFT hog division)- The USDA Tallow, Protein, and Hide
Report - FOB Central U.S. daily price for each Product (USDA report NW_LS442)
will be used to calculate a weekly average (Friday through Thursday). The
spreads to that weekly average (defined below) will determine the purchase price
for each Product at each Facility for the following week. The price and volume
will be established on Thursday afternoon for the following week.
Bloodmeal (Central Price FOB)
Louisville Even
Marshalltown Even
Worthington Even
Choice White Grease (Central Price FOB)
Louisville Even
Marshalltown Even
Worthington Even
Lard (Chicago Price, FOB Facility)
Louisville "***"
Marshalltown "***"
Worthington "***"
Meat and Bone Meal
Louisville Even to Pork Meat & Bone Meal
Marshalltown Even to Pork Meat & Bone Meal
Worthington "***" Pork Meat & Bone Meal
Other Products produced by Swift's Facilities that are not reflected in the USDA
Central US By-Product report (e.g., xxxxx grease) to be priced on a spot market
basis mutually agreed to by the parties.
7
